| Corporate finance course | Risk and return |
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| Efficient portfolio Efficient portfolio = highest expected return for a given risk we choose the one we wish according to our preference to risk expected risk premium = beta * market risk premium The Capital asset pricing model capm: r-r(f) = beta (r(m)-r(f)) This model does not work that well since the mid 60’s. The Capital Asset Price Model: parallel with consumption of two goods (1 market-free investment and a representative bundle of stocks), budget line (trade-off between the expected return and the riskyness of that return= standard deviation), indifference curves (combinations that leave the investor equally satisfied. R.portfolio/ = R.free-risk inv. + (R.market – R.free-risk inv)// sigma.market * sigma. free-risk inv Arbitrage pricing theory Capital structure and the company cost of capital Why merge >> |
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Corporate finance PART ONE: CAPITAL EXPENDITURE PART TWO. BASICS OF FINANCE PART THREE FINANCING DECISIONS PART FOUR FINANCIAL MANAGEMENT Course created and updated by Dr David Chelly, PhD in Management sciences from the University of Tours.
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